Luxury Home Values Increase In The Fourth Quarter
Double-Digit Gains In San Francisco, Los Angeles and San Diego Year-Over-Year
SAN FRANCISCO, Feb. 24, 2014 /PRNewswire/ -- Luxury home values increased in San Francisco, Los Angeles and San Diego in the fourth quarter of 2013 compared to a year ago, according to the First Republic Prestige Home Index™ by First Republic Bank, a leading private bank and wealth management company.
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In the fourth quarter of 2013, the Index indicated the following:
- San Francisco Bay Area values climbed 12.4% from the fourth quarter of 2012 and 1.8% from the third quarter of 2013. The average luxury home in San Francisco is $3.1 million.
- Los Angeles area values rose 13.7% from the fourth quarter a year ago and 1.3% from the third quarter of 2013. The average luxury home in Los Angeles is $2.3 million.
- San Diego area values gained 16.6% year-over-year and 1.3% from the third quarter of 2013. The average luxury home in San Diego is almost $1.9 million.
"Luxury home prices again posted double-digit gains on a year-over-year basis in San Francisco, Los Angeles and San Diego," said Katherine August-deWilde, President and Chief Operating Officer of First Republic Bank. "Market conditions in California's luxury communities continue to be very strong. Limited inventory, robust demand and low interest rates are driving prices higher."
First Republic Bank produces the Prestige Home Index each quarter with Core-Logic Case-Shiller, a leading provider of automated property valuation services and home price metrics to U.S. financial institutions. Historical results of the Index, which has tracked luxury homes since 1985, are accessible at www.firstrepublic.com. First Republic Bank is an active lender in the luxury home market for primary residences and vacation homes.
The region experienced its third straight quarter of year-over-year, double-digit gains. Prices are close to an all-time high.
In San Francisco, the market was very active. "Prices continue to rise because there is so little inventory and so much demand," said Mary Lou Castellanos of Sotheby's International in San Francisco. "There are a lot of people who want to buy. The homes that do come to market generate multiple offers and offers over the asking."
The market in Silicon Valley was even stronger. "From Palo Alto to Atherton, we are seeing offers 20% to 40% over the asking price," said Pat Kalish of Alain Pinel Real Estate in Palo Alto. "It's tech money as well as foreign buyers. From all indications, prices will keep increasing because the inventory is so low. If you're a homeowner, this is one of the best times ever to sell."
In Marin County, the market improved in the fourth quarter. "Going into the end of the year, homes $4 million and above finally picked up," said Pat Montag of Sotheby's International Realty in Mill Valley. "Prices are getting close to the peak of the market in 2007. We have very little inventory and that's constraining the market."
The region posted its second consecutive quarter of double-digit gains on a year-over-year basis.
"We had a busier-than-normal fourth quarter, despite the holidays," said Mary Beth Woods of Coldwell Banker in Brentwood. "Because there is so little inventory, the buyers swarm when a property comes on the market. Almost 90% of the time there are multiple offers, usually over the asking price. This is one of the strongest markets I've seen."
David Mossler of Tele Properties in Beverly Hills agreed. "The demand is incredible. It is much stronger than it was in 2006 at the height of the market. Homes that were selling at $10 million in 2005 and 2006 are now $20 million and $25 million. It's astounding."
In Orange County, values also continued to rise. "We saw a dip in sales activity in the fourth quarter, but prices increased," said Ron Millar of HOM Sotheby's in Newport Beach. "There are plenty of buyers and not enough inventory. Homes at $4 million are selling above their comparables from last year. The attractive properties are generating multiple offers. I see some buyer resistance now and expect the market to level off."
The 16.6% increase year-over-year was also the second straight quarter of double-digit gains in the region.
"In Rancho Santa Fe, we're seeing multiple offers and offers over the asking for properly priced homes up to $3 million," said Linda Sansone of Willis Allen in Rancho Santa Fe. "From $3 million to $5 million, the market is solid, prices are appreciating and supply is tight. For homes $5 million and above, there is plenty of supply, and prices are rising modestly."
Sue De Legge of Sue De Legge & Associates in Rancho Santa Fe said home price appreciation was driving the market. "Rising prices are motivating more sellers to list their homes. We expect more inventory to be brought to market in coming months."
About The First Republic Prestige Home Index
The First Republic Prestige Home Index™ is the first statistical model of its kind customized to measure changes in homes valued at more than $1 million in key California urban markets. Some common features of luxury homes in the Index: 3,000 to 6,000 square feet, three to six bedrooms, and three to six bathrooms. San Francisco Bay Area properties include a cross-section of luxury homes in Alamo, Atherton, Belvedere, Danville, Healdsburg, Hillsborough, Lafayette, Los Altos, Los Gatos, Mill Valley, Moraga, Orinda, Palo Alto, Piedmont, Portola Valley, Ross, St. Helena, San Francisco, Saratoga, Sonoma, Tiburon and Woodside. Properties in Los Angeles represent a cross-section of luxury homes in Arcadia, Beverly Hills, Calabasas, La Cañada Flintridge, Encino, Los Angeles, Malibu, Marina del Rey, North Hollywood, Pacific Palisades, Pasadena, Playa del Rey, Santa Monica, Studio City, and the West Los Angeles enclaves of Bel Air, Brentwood and Westwood. San Diego properties represent a cross-section of luxury homes in Carlsbad, Coronado, Del Mar, Encinitas, La Jolla, La Mesa, Poway, Rancho Santa Fe, San Diego and Solana Beach. In producing the Index, Core-Logic Case-Shiller draws upon its economic database and years of experience in tracking single-family home values; collects and cross-checks data from multiple sources; achieves a weighted balance of validation elements such as repeat sales, comparable sales and physical home characteristics; and combines this with First Republic's extensive local market knowledge.
About First Republic Bank
Founded in 1985, First Republic and its subsidiaries offer private banking, private business banking and private wealth management, including investment, trust and brokerage services. First Republic specializes in delivering exceptional, relationship-based service, with a solid commitment to responsiveness and action. Services are offered through preferred banking or wealth management offices primarily in San Francisco, Palo Alto, Los Angeles, Santa Barbara, Newport Beach, San Diego, Portland, Boston, Palm Beach, Greenwich, and New York City. First Republic offers a complete line of banking products for individuals and businesses, including deposit services, as well as residential, commercial and personal loans. For more information, visit www.firstrepublic.com.
SOURCE First Republic Bank
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